HMRC has come up with rather an "interesting" wheeze wrt improving its cashflow.
HMRC wants to delay telling employees about changes in their tax codes for up to a month, which could see people paying more tax than they owe.
The delay means that people would only find out when it is too late to correct the mistake, and the money has already been deducted from their monthly salary.
Lesley Fidler, a tax director at Baker Tilly, is quoted by the Telegraph:
"When you are counting the pounds in your pay packet you don't worry that it will work itself in the long term, you are thinking 'have I got enough this month?'Under the proposal employees will have to wait up to 30 days to be notified of a tax code change. The regulation is currently being consulted on, but is likely to be laid before Parliament later this Summer.
This delay does seem to be manipulated, it's a sinister sense of manipulation. People will effectively be lending to the taxman out of their salaries."
A spokesman for HMRC said:
"Where this happens, the employer will still be informed immediately of any change and if a customer requests a tax code we will issue one.Good for HMRC's cashflow, but not for the taxpayers' though!
HMRC anticipates savings for the taxpayer of several millions pounds in printing and postage costs, as a result of these changes.
HMRC is currently consulting on the proposed changes and welcomes comments on the detail. We plan to lay finalised regulations in the autumn."
Tax does have to be taxing.
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